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Inland Revenue Ordinance
Following is the speech by the Secretary for the Treasury, Mr K C Kwong, in moving the resolution of the Inland Revenue Ordinance in the Legislative Council today (Wednesday):
Mr President,
I move the resolution standing in my name in the Order paper.
To enhance Hong Kong's status as an international financial centre and to encourage the development of our capital market, Members approved amendments to the Inland Revenue Ordinance in 1992 to exempt from profits tax the profits arising from Hong Kong dollar-denominated debt instruments issued by specified multilateral agencies with top credit ratings. In addition, Members also approved amendments to the Stamp Duty Ordinance to exempt such instruments from stamp duty. Schedule 6 to the Inland Revenue Ordinance specifies the agencies which are so exempt. The Ordinance also provides that this Council may make additions to the list of exempt institutions by resolution.
The first four multilateral agencies exempted were the Asian Development Bank, the International Bank for Reconstruction and Development, the International Finance Corporation and the European Investment Bank. The exemption was later extended to four other multilateral agencies. They are the European Bank for Reconstruction and Development, the Inter-American Development Bank, the Nordic Investment Bank and the European Company for the Financing of Railroad Rolling Stock. By late June 1995, the amount of Hong Kong dollar debt securities issued by these exempt institutions stood at HK$12.4 billion, representing about 7.5% of the total Hong Kong dollar debt paper outstanding.
I now propose to add the Council of Europe Social Development Fund (or CEF for short) to the list. Like the existing eight exempt institutions, CEF is a supranational agency with top credit ratings. It has indicated interest in issuing Hong Kong dollar-denominated debt instruments. We can enhance the attractiveness of these instruments to investors by granting them similar exemption from profits tax and stamp duty. This would contribute to the expansion of the Hong Kong capital market. It would also further promote Hong Kong's development as an international financial
centre.
Mr President, I beg to move.
End/Wednesday, July 26, 1995